Struggling fashion and homeware retailer Laura Ashley is to appoint administrators in what is thought to be one of the first major casualties of the coronavirus outbreak.
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Despite trading up by almost a quarter in the seven weeks to 13 March, the retailer said it had been unable to secure new funding from investors because of the increased uncertainty around how it will be affected by the covid-19 pandemic.
Announcing its intention to appoint PwC as administrator today (17 March), Laura Ashley said in a statement to investors: “The covid-19 outbreak has had an immediate and significant impact on trading, and ongoing developments indicate that this will be a sustained national situation.
“Discussions with stakeholders have been ongoing and the directors are in advanced discussions for the provision of third-party debt funding. However, based on the company’s revised cashflow forecasts and the increased uncertainty facing the group, the company expects that it will not be in a position to draw down additional funds from third-party lenders in a timely manner sufficient to support working capital requirements.”
The company operates more than 150 stores in the UK and has 2,700 employees.
On Friday, Laura Ashley, which avoided collapse last month after securing new investment from US bank Wells Fargo, said it had “not yet seen a significant financial impact due to covid-19” but noted the coronavirus had “the potential to negatively influence future trading as a result of reduced footfall”.
The CBI today said the coronavirus pandemic could potentially cost “hundreds of thousands” of jobs due to the level of disruption expected.